What changed in UPEXI, INC.'s 2024 10-K compared to 2023?

Across the narrative sections we track, UPEXI, INC. (UPXI) added 205 paragraphs, removed 223, and edited 98 between the 2023 and 2024 10-K filings. The biggest movers are Item 7. Management's Discussion & Analysis (+93/−75), Item 1. Business (+40/−70), Item 1A. Risk Factors (+55/−57).

Did UPEXI, INC. add new Risk Factors in the 2024 10-K?

Yes — Item 1A Risk Factors shows 55 new/edited paragraphs and 57 removed paragraphs versus the 2023 10-K.

What changed in UPEXI, INC.'s MD&A (Item 7) in 2024?

Item 7 Management's Discussion & Analysis shows 93 new/edited paragraphs and 75 removed paragraphs year-over-year. Read the side-by-side diff to see exactly which revenue, margin, and outlook commentary was rewritten.

Did UPEXI, INC.'s Legal Proceedings (Item 3) change in 2024?

Item 3 shows 6 added/edited paragraphs and 1 removed paragraphs — usually indicating new litigation disclosed or settled cases removed.

Where does this UPXI 10-K diff come from?

The source filings are UPEXI, INC.'s official 2023 and 2024 Form 10-K annual reports from SEC EDGAR. 10q10k.net parses each filing, aligns paragraphs by section (Item 1, 1A, 1C, 2, 3, 7, 7A), and highlights every added, removed and edited sentence side-by-side.

What changed in UPEXI, INC.'s 10-K — 2023 vs 2024

Paragraph-level year-over-year comparison of UPEXI, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+205 added−223 removedSource: 10-K (2024-12-16) vs 10-K (2023-10-03)

Top changes in UPEXI, INC.'s 2024 10-K

205 paragraphs added · 223 removed · 98 edited across 6 sections

Item 7. Management's Discussion & Analysis+93 / −75 · 21 edited
Item 1. Business+40 / −70 · 19 edited
Item 1A. Risk Factors+55 / −57 · 49 edited
Item 5. Market for Registrant's Common Equity+8 / −16 · 7 edited
Item 2. Properties+3 / −4 · 1 edited

Item 1. Business

Business — how the company describes what it does

19 edited+21 added−51 removed27 unchanged

2023 filing

2024 filing

Biggest changeThe Company’s fifteen active subsidiaries are as follows: ☐ HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company o SWCH, LLC, a Delaware limited liability company o Cresco Management, LLC, a California limited liability company ☐ Trunano Labs, Inc., a Nevada corporation ☐ MW Products, Inc., a Nevada corporation ☐ Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company ☐ VitaMedica, Inc, a Nevada corporation ☐ Upexi Enterprise, LLC, a Delaware limited liability company o Upexi Property & Assets, LLC, a Delaware limited liability company ■ Upexi 17129 Florida, LLC, a Delaware limited liability company o E-Core Technology, Inc. a Florida corporation o Upexi Distribution Management LLC, a Delaware limited liability company ☐ Interactive Offers, LLC (“Interactive”), a Delaware limited liability company ☐ Cygnet Online, LLC, a Delaware limited liability company, 55% owned (100% owned as of September 1, 2023) In addition, the Company has four wholly owned subsidiaries that had no activity during the year ended June 30, 2023. · Steam Distribution, LLC, a California limited liability company · One Hit Wonder, Inc., a California corporation · One Hit Wonder Holdings, LLC, a California limited liability company · Vape Estate, Inc., a Nevada Corporation HAVZ, LLC, d/b/a/ Steam Wholesale operates manufacturing and/or distribution centers in Las Vegas, Nevada supporting our health and wellness products, including those products manufactured with hemp ingredients and our overall distribution operations.

Biggest changeThe Company has eleven active subsidiaries, which include: ☐ HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company ☐ Gummy Labs, LLC, a Delaware limited liability company ☐ MW Products, Inc., a Nevada corporation ☐ Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company ☐ Upexi Enterprise, LLC, a Delaware limited liability company o Upexi Distribution LLC, a Delaware limited liability company o Upexi Distribution Management LLC, a Delaware limited liability company o Upexi Property & Assets, LLC, a Delaware limited liability company ■ Upexi 17129 Florida, LLC, a Delaware limited liability company ☐ Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company (100% owned as of September 1, 2023) The following subsidiaries had no activity during the years ended June 30, 2024 and 2023: ☐ Upexi CP, LLC, a Delaware limited liability company ☐ Upexi CP / Canada Inc., a Canadian corporation ☐ Prax Products, LLC, a Florida limited liability company ☐ Upexi Development and Marketing, LLC., a Delaware limited liability company ☐ Trunano Labs, Inc., a Nevada corporation The following subsidiaries were divested during the years ended June 30, 2024 and 2023: ☐ VitaMedica, Inc. a Nevada corporation ☐ E-Core Technology, Inc. a Florida corporation ☐ Infusionz LLC, a Colorado limited liability company ☐ Interactive Offers, LLC, a Delaware limited liability company In addition, the Company has six wholly owned subsidiaries that had no activity during the years ended June 30, 2024 and 2023.

Unless Congress specifically enacts laws preempting the state regulations of hemp products, we will continue to be subject not only to federal law but various state laws. Presently, Upexi and only distributes hemp-products in states that it is legal to do so.

Unless Congress specifically enacts laws preempting the state regulations of hemp products, we will continue to be subject not only to federal law but various state laws. Presently, Upexi only distributes hemp-products in states that it is legal to do so.

Our executive team comes from a background in logistics, with CEO, Allan Marshall, the founder of XPO Logistics (formerly known as Segmentz, Inc.). With increased shipping costs affecting online retailers, our strength is understanding this and finding ways to lower our costs and overhead, thus increasing profit margins on all of our products. Liquidation Markets.

We not only get a great brand, but look to retain the personnel, often the heartbeat of said brand, give them resources, and even utilize them for other brands that we have launched internally or acquired. We strongly believe that continued success relies on a growing team of experts across various industries. Advertising technology.

The date on which the Company qualifies as a ‘large accelerated filer’, as defined in section 240.12b-2(2) of title 46, Code of Federal Regulations, or any successor thereto. 5 Table of Contents As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002.

The date on which the Company qualifies as a ‘large accelerated filer’, as defined in section 240.12b-2(2) of title 46, Code of Federal Regulations, or any successor thereto. As an emerging growth company, we are exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002.

We operate our business in markets that are both highly regulated and rapidly evolving. We are subject to numerous federal and state laws and regulations affecting the manufacturing, packaging, labeling and sale of food, beverages, dietary supplements, and personal care products/cosmetics, as well as the use of hemp and hemp-derived ingredients like CBD in such products.

We are subject to numerous federal and state laws and regulations affecting the manufacturing, packaging, labeling and sale of food, beverages, dietary supplements, and personal care products/cosmetics, as well as the use of hemp and hemp-derived ingredients like CBD in such products.

Any such costs, which may rise in the future as a result of changes in such applicable laws and regulations and the expansion of the Company’s business, could make our products less attractive to our customers, delay the introduction of new products, and require the Company to implement policies and procedures designed to ensure compliance with applicable laws and regulations.

Item 1. Business General Overview As used in this current report and unless otherwise indicated, the terms “we”, “us” and “our” mean Upexi, Inc., unless otherwise indicated.

Item 1. Business General Overview As used in this annual report and unless otherwise indicated, the terms “we”, “us”, “our”, “Upexi”, and the “Company” mean Upexi, Inc., a Nevada corporation formed in 2018.

We connect pet owners with the products they need to simplify and improve at-home wellness and grooming care for their beloved pets, empowering pet parents to provide their cherished furry companions with the pampering they deserve in the comfort of their own space. Lucky tails products consist of its flagship nail grinder and healthy all-natural pet supplements.

We connect pet owners with the products they need to simplify and improve at-home wellness and grooming care for their beloved pets, empowering pet parents to provide their cherished furry companions with the pampering they deserve in the comfort of their own space. 5 Table of Contents LuckyTail products consist of its flagship nail grinder and healthy all-natural pet supplements At PRAX, we fuel modern go-getters to achieve their best selves through innovative energy solutions.

You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

E-Core distributes non-owned branded products to national retail distributors and has branded products in the toy industry that E-Core sells direct to consumers through online sales channels and to national retail distributors. October 2022 – The Company sold all rights to Infusionz brands and the manufacturing of certain private label business.

Our target customers are first and foremost end consumers via internet sales; however, we see growth opportunities in direct-to-consumer retail stores, cooperatives, affiliate sales and master distributors. As we continue to develop our business, these markets may change, be re-prioritized or eliminated as management responds to consumer and regulatory developments.

It is important to note that FDA has not taken any specific positions regarding the regulatory status of other cannabinoids, for example CBDA, CBDG, and CBDN.

It is important to note that FDA has not taken any specific positions regarding the regulatory status of other cannabinoids, for example CBDA, CBDG, and CBDN. Finally, the Federal Trade Commission is the agency that is vested with ensuring that all marketing claims for hemp products are truthful and non-misleading.

From fortifying your immune system, to sharpening cognition, to combating the rigors of daily stress, our products are designed to deliver full-body wellness and convenience with every serving. 7 Table of Contents Moonwlkr Health is on a mission to elevate wellness through flavorful innovation.

Our suite of premium mushroom extracts are meticulously crafted to elevate overall well-being, offering a wide spectrum of health benefits and a holistic approach to everyday wellness. From fortifying your immune system, to sharpening cognition, to combating the rigors of daily stress, our products are designed to deliver full-body wellness and convenience with every serving.

Changes in the state laws and regulations could again either positively or adversely affect our ability to sell products in those states.

Changes in the state laws and regulations could again either positively or adversely affect our ability to sell products in those states. Employees The Company has 64 full-time employees working out of its headquarters in Tampa, Florida, its Odessa, Florida, manufacturing facility, its distribution warehouse in Tampa Florida or individuals’ home-based offices.

Employees The Company has 95 full-time employees working out of its headquarters in Tampa Florida, its Henderson, Nevada, manufacturing facility, its offices and distribution warehouses in Southern Florida or individuals’ home-based offices. 12 Table of Contents WHERE YOU CAN FIND MORE INFORMATION You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC.

WHERE YOU CAN FIND MORE INFORMATION You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E.

Our goal is never to compete against these aggregators, but to do our own research, focus on profitability, and grow efficiently, rather than overextend ourselves and pay up for valuations that don’t make sense. Government Regulation We are subject to laws and regulations affecting our operations in a number of areas.

Government Regulation We are subject to laws and regulations affecting our operations in a number of areas.

On October 31, 2022, the Company and its wholly owned subsidiary Upexi Enterprise, LLC, completed a securities purchase agreement to purchase the outstanding stock of E-Core Technology, Inc. d/b/a New England Technology, Inc. (“E-Core”), a Florida corporation.

The acquisition of LuckyTail provided the Company with a foothold in the pet care industry and a strong presence on Amazon and its eCommerce store, offering nutritional and grooming products domestically and internationally. October 2022 - The Company purchased E-Core Technology, Inc. d/b/a New England Technology, Inc. (“E-Core”), a Florida corporation.

(the “Company”) entered into an Equity Interest Purchase Agreement (“EIPA”) pursuant to which the Company sold one hundred percent (100%) of the issued and outstanding equity (the “Interests”) of its wholly owned subsidiary Interactive Offers, LLC (“Interactive”) to Amplifyir Inc. (the “Buyer”).

The Company started manufacturing again for brands owned by the Company to ensure there was no interruption to the supply chain of the products. August 2023 – The Company purchased the remaining ownership of Cygnet. August 2023 – The Company sold one hundred percent (100%) of the issued and outstanding equity of its wholly owned subsidiary Interactive Offers, LLC.

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On August 17, 2022, the Company changed its name from Grove, Inc. to Upexi, Inc. to better reflect the evolution of the business from a single focus to the overall product distribution of product brands owned by the Company and other select brands that align with our overall product distribution strategy. Upexi, Inc.

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All of the entities were dissolved or canceled as of June 30, 2024. · Steam Distribution, LLC, a California limited liability company · One Hit Wonder, Inc., a California corporation · One Hit Wonder Holdings, LLC, a California limited liability company · Vape Estate, Inc., a Nevada Corporation · SWCH, LLC, a Delaware limited liability company · Cresco Management, LLC, a California limited liability company 4 Table of Contents Emerging Growth Company Status We are an emerging growth company under the Jumpstart our Business Startups (JOBS) Act of 2012.

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(the “Company”) is a Nevada corporation with fifteen active subsidiaries.

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DESCRIPTION OF BUSINESS Our Company Upexi is a brand owner specializing in the development, manufacturing, and distribution of consumer products. We reach consumers through our direct-to-consumer network, wholesale partnerships, and major third-party platforms like Amazon. The Brands LuckyTail, where at-home care meets innovation.

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The Company’s fifteen active subsidiaries are as follows: ☐ HAVZ, LLC, d/b/a/ Steam Wholesale, a California limited liability company o SWCH, LLC, a Delaware limited liability company o Cresco Management, LLC, a California limited liability company ☐ Trunano Labs, Inc., a Nevada corporation ☐ MW Products, Inc., a Nevada corporation ☐ Upexi Holding, LLC, a Delaware limited liability company o Upexi Pet Products, LLC, a Delaware limited liability company ☐ VitaMedica, Inc, a Nevada corporation ☐ Upexi Enterprise, LLC, a Delaware limited liability company o Upexi Property & Assets, LLC, a Delaware limited liability company ■ Upexi 17129 Florida, LLC, a Delaware limited liability company o E-Core Technology, Inc. a Florida corporation o Upexi Distribution Management LLC, a Delaware limited liability company ☐ Interactive Offers, LLC (“Interactive”), a Delaware limited liability company ☐ Cygnet Online, LLC (“Cygnet”), a Delaware limited liability company, 55% owned (100% owned as of September 1, 2023) Business Acquisitions On August 1, 2021, the Company completed an asset purchase agreement with Grove Acquisition Subsidiary, Inc., a Nevada corporation and wholly owned subsidiary of the Company, and the members of VitaMedica Corporation, a California corporation, to purchase all the assets and assume certain liabilities of VitaMedica.

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Powered by paraxanthine—an advanced alternative to caffeine, our mission is to support your hustle and power your ambitions. Energize better, perform smarter, fuel different. We are launching this new brand in October of 2024 with several innovative products to follow. At Cure Mushrooms, we have harnessed the extraordinary benefits of nature’s most powerful superfood: functional mushrooms.

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VitaMedica is a leading online seller of supplements for surgery, recovery, skin, beauty, health, and wellness.

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At Moonwlkr, we craft cannabinoid experiences that take you beyond the ordinary. By combining award-winning natural flavors and one-of-a-kind blends, we invite you to feel the thrill of the unknown, the calm of weightless relaxation, or the anticipation of a new adventure.

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On October 1, 2021, the Company entered into an equity interest purchase agreement with Gyprock Holdings LLC, a Delaware limited liability company, MFA Holdings Corp., a Florida corporation, and Sherwood Ventures, LLC, a Texas limited liability company, to acquire all of the outstanding membership interest of Interactive Offers, LLC, a Delaware limited liability company.

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At Gumi Labs we manufacture gummies and other products supporting our health and wellness products, including those products manufactured with hemp ingredients.

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On April 1, 2022, the Company entered into a securities purchase agreement with the single investor to purchase 55% of the equity interest in Cygnet Online, LLC, a Delaware limited liability company, and agreements to enable the Company to purchase the remaining 45% over the following two years. 4 Table of Contents On September 1, 2023, the Company purchased the remaining 45% of Cygnet Online, LLC for $500,000 cash, 90,909 shares of the Company’s common stock and a $300,000 cash payment due on September 1, 2024.

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Our manufacturing facility has been moved to Florida and is at full capacity as of August of 2024. 6 Table of Contents At Upexi Distribution, we manage the warehousing and logistic needs of the Company and provide storage, consolidation, assembly, Amazon preparation, distribution and fulfilment services to our brands and our manufacturing operation.

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On August 12, 2022, the Company completed an asset purchase agreement with GA Solutions, LLC, a Delaware limited liability company (“LuckyTail”), pursuant to which the Company acquired substantially all assets of LuckyTail. LuckyTail sells pet nail grinders and other pet products through various sales channels including some international sales channels.

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Our history The Company operates manufacturing and/or distribution centers in Nevada supporting health and wellness products, including those products manufactured with hemp ingredients and our overall distribution operations. July 2020 - the Company purchased Infusionz LLC.

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Business Divested On October 26, 2022, the Company executed a membership interest purchase agreement to sell 100% of the membership interests of Infusionz LLC, a Colorado limited liability company (“Infusionz”), included in the sale was all rights to Infusionz brands and the manufacturing of certain private label business. Infusionz was originally purchased by the Company in July of 2020.

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Infusionz was a similar business in the manufacturing and distribution of products and owned certain product brands that we believe could be expanded through the merger. June 2021 - Upexi Inc. became a listed company on the NASDAQ stock exchange. August 2021 - The Company purchased the assets of VitaMedica Corporation, a California corporation (VitaMedica).

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The divestiture of Infusionz and related private label manufacturing represents a strategic shift in our operations and will allow us to become a predominantly product distribution focused company for both our Company owned brands and non-owned brands.

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VitaMedica is a leading online seller of supplements for surgery, recovery, skin, beauty, health and wellness. October 2021 - The Company purchased Interactive Offers, LLC, a Delaware limited liability company. Interactive provides programmatic advertising with its SAAS platform which allows for programmatic advertisement placement automatically on any partners’ sites from a simple dashboard.

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Accordingly, the results of the business were classified as discontinued operations in our condensed statements of operations and excluded from both continuing operations and segment results for all periods presented. The Company has transferred Infusionz LLC corporate ownership and the information necessary to operate the business.

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April 2022 – The Company purchased 55% of Cygnet Online, LLC, a Delaware limited liability company (“Cygnet”). Cygnet operates a warehouse and distribution center for the management of day-to-day operations for product liquidation through Amazon and other on-line resellers. August 2022 – The Company purchased the assets to the brand LuckyTail.

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On June 30, 2023, operations were still not transitioned, and the Buyer still had not cured the defaults dating back to December of 2022. The Company has notified the Buyer of the defaults and has notified the Buyer that all obligations and undertakings to the Buyer are terminated. On August 31, 2023, Upexi, Inc.

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Infusionz was originally purchased by the Company in July of 2020. July 2023 – The Company notified the Buyer of the Infusionz brands and the manufacturing business of the defaults and notified the Buyer that all obligations and undertakings to the Buyer are terminated.

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The purchase price for the Interests was One Million Two Hundred Fifty Thousand Dollars ($1,250,000), subject to certain customary post-closing adjustments. In addition, the Buyer is obligated to pay the Company two-and one-half percent (2.5%) of certain advertising revenues of Interactive for a two-year period post-closing.

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May 2024 – The Company sold its equity interest in the wholly owned subsidiary VitaMedica, a Nevada corporation.

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Accordingly, the results of the business were classified as discontinued operations in our statements of operations and excluded from both continuing operations and segment results for all periods presented. Emerging Growth Company Status We are an emerging growth company under the Jumpstart our Business Startups (JOBS) Act of 2012.

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June 2024 – The Company sold its equity interest in the wholly owned subsidiary E-Core Technology, Inc. d/b/a New England Technology, Inc. a Florida corporation. 7 Table of Contents Regulations In the United States, hemp products that are manufactured by Upexi are regulated by the U.S.

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DESCRIPTION OF BUSINESS Our Company Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets. We operate in emerging industries with high growth trends and look to drive organic growth of our current brands.

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Our Products Upexi is a brand owner specializing in the development, manufacturing, and distribution of consumer products. We reach consumers through our direct-to-consumer network, wholesale partnerships, and major third-party platforms like Amazon. The market, customers and distribution methods for eCommerce products are large and diverse.

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We focus on direct to consumer and Amazon brands that are scalable and have anticipated, high industry growth trends. Our goal is to continue to accumulate consumer data and build out a significant customer database across all industries we sell into. The growth of our current customer database has been key to the year-over-year gains in sales and cash flow.

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As we continue to develop our business, these markets may change, be re-prioritized or eliminated as management responds to consumer and regulatory developments. 8 Table of Contents Our Competitive Strengths We attribute our success to our consumer products by controlling each phase of the process from manufacturing to order fulfillment.

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To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies. We utilize our in-house SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands. Upexi, Inc.

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As the manufacturer of our primary products, we are able to control our costs and improve profitability at each step of the process, starting with the development of new products. Our products take priority in manufacturing give us a higher inventory turnover rate and accelerates the timeline for new product launches.

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(the “Company”) is a Nevada corporation and operates through fifteen active subsidiaries in the digital first brand business, Amazon and wholesale distribution, and customer insights businesses. Upexi specializes in acquiring, building, and growing digital first, omnichannel brands in high growth, high margin sectors such as health, wellness, pet, and beauty.

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In addition, we are able to adjust to market demands and change production schedules to ensure we maintain optimized inventory levels. Our primary sales channel is our ecommerce site and our marketing team is led by an expert in the online direct to consumer sales as she has been with the brand since its inception.

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Leveraging our in-house expertise and technology, we scale our brands with a consumer centric approach, tapping into our in-house core capabilities and market insights across our portfolio to foster innovation and accessibility. Our growing consumer database has been key to the year-over-year gains in sales and profits.

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We have the ability to direct product manufacturing and increase sales with special promotions and product variations with little or no delay in bringing the product to market. Our direct to consumer focus reduces the overall supply costs as we do not have retail outlets or maintain distribution networks for small retail operations.

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Further bolstering growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can be scaled quickly and profitably while reducing costs through corporate synergies. Upexi’s Enterprise LLC operates two wholly subsidiaries; Cygnet and E-Core.

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Our Growth Strategy Our growth will focus on the expansion of our brands portfolio through organic growth and optimization of our supply chain. Direct-to-Consumer expansion. Our direct-to-consumer business is expected to be our growth driver for the next several years with additional brands and products. Talent acquisition.

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Cygnet primarily sells products through Amazon with a focus on the wellness industry, while E-Core has historically focused on product liquidation of consumer electronics and luxury goods. Our Brands 6 Table of Contents Tytan Tiles is a growing brand in the children’s STEM toy category.

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Competition There is heavy competition in our products and we are able to carve out certain niche markets within the industry and there are few competitors that control their manufacturing to distribution as we do.

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The Brand is available in Walmart’s 3,900 stores, Sam’s Club, BJ’s, Target, and other select box retail locations. The brand also holds a Disney License for new children sets being sold into Amazon and DTC year end 2023. VitaMedica’s mission is to empower wellness journeys through science-based holistic natural health solutions.

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Our goal is to compete through our product delivery and introduction of new products that we manufacture and deliver directly to the consumer giving us an advantage on our competitors. We will focus on profitability, and grow efficiently, without the requirement of additional capital.

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Through The Science of Natural Health® we believe in a world where everyone can take ownership of their health, happiness, and vitality. For over 25 years, VitaMedica clinician-originated nutraceuticals and cosmeceuticals have been recommended by thousands of doctors to serve millions of patients.

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VitaMedica’s sales model includes wholesale distribution through surgeons and med spas and direct to consumers through eCommerce and marketplaces. LuckyTail, where at-home care meets innovation.

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At Cure Mushrooms, we have harnessed the extraordinary benefits of nature’s most powerful superfood: functional mushrooms. Our suite of premium mushroom extracts are meticulously crafted to elevate overall well-being, offering a wide spectrum of health benefits and a holistic approach to everyday wellness.

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We are committed to providing innovative and nutritious gummy supplements that effortlessly integrate into your daily routine. Our formulations boast quality ingredients you can trust, paired with flavors that delight and inspire. With Moonwlkr Health, nourishing your body has never been so simple, delicious, and enjoyable. Join us in embracing a lifestyle of vitality, where wellness meets indulgence.

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We have continued to manage these operations with our corporate focus moving towards other larger opportunities and investments for the future. 8 Table of Contents In the United States, hemp products that are manufactured by Upexi are regulated by the U.S.

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Finally, the Federal Trade Commission is the agency that is vested with ensuring that all marketing claims for hemp products are truthful and non-misleading. 9 Table of Contents Our Products Upexi is a multi-faceted brand owner with established brands in the health, wellness, pet, beauty and other growing markets.

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We operate in emerging industries with high growth trends and look to drive organic growth of our current brands. We focus on direct to consumer and Amazon brands that are scalable and have anticipated, high industry growth trends. Our goal is to continue to accumulate consumer data and build out a significant customer database across all industries we sell into.

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The growth of our current customer database has been key to the year-over-year gains in sales and profits. To drive additional growth, we have and will continue to acquire profitable Amazon and eCommerce businesses that can scale quickly and reduce costs through corporate synergies.

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We utilize our in-house SaaS programmatic ad technology to help achieve a lower cost per acquisition and accumulate consumer data for increased cross-selling between our growing portfolio of brands. The global ecommerce growth rate for 2022 is forecast at 12.2 percent, bringing global eCommerce sales worldwide to $5.542 trillion.

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Online shopping trends are expected to grow 50 percent in the U.S. in the next few years. eCommerce sales are forecast to increase by a whopping 50 percent from $907.9 billion in 2022 to $1.4 trillion in 2025.

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The industry saw exponential growth during the pandemic, as consumers were more apt to buy online than go into stores, but while the CAGR has dipped from 2020, the industry continues to grow steadily. The market, customers and distribution methods for eCommerce products are large and diverse.

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Each of our brands creates new opportunities for us to target additional markets and consumers. Our goal through this diverse portfolio is to create products that can be cross-sold between brands to help take advantage of our growing list of consumer data.

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Our Competitive Strengths We attribute our success to our diverse portfolio of consumer products. Diversification of Product Offerings. As an aggregator, our research and development team carefully tracks the growth rates for various consumer products, which serves as the first means of identifying profitable brands that have significant opportunities for scale.

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While many companies continue to spend on growth at all costs, we have spent to increase our profitability and build a foundation for profits in the toughest of times. We remained patient when other aggregators were over-extending their means which has provided us for better opportunities at more favorable valuations. Advertising Technology .

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We understand that advertising and consumer data is the key to growth when it comes to any eCommerce business. Our investment in such technology helps lower our advertising costs, while providing a revenue stream from others who we outsource this programmatic SAAS to. This ownership of data allows us to help cross-sell any brand we acquire or launch. Logistical Expertise.

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Resellers on and off Amazon represent a significant part of our business, which allows us to use our capital to buy in bulk with quick resale opportunities, whether it be direct Amazon listings or through partnerships with the likes of Walmart, BJ’s, Costco, Sam’s Club, etc.

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As a result, we are able to expand our network, build new relationships, and sell branded products without the added cost of advertising. 10 Table of Contents Retail Partnerships.

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While eCommerce is our direct line of business, we have grown and continue to expand our relationships with big box retailers in order to sell branded products as resellers or to place our in-house brands in those stores. With longstanding accounts that we have taken ownership of through acquisitions, we have grown our network and have untapped additional revenue streams.

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Professionalism and Entrepreneurial Culture . Our professionalism and entrepreneurial culture fosters highly dedicated employees who provide our customers with unsurpassed customer service.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

49 edited+6 added−8 removed85 unchanged

2023 filing

2024 filing

Biggest changeThe FDA created a task force to address the further regulation of CBD and other cannabis-derived products and is currently evaluating the applicable science and pathways for regulating CBD and other cannabis-derived ingredients. 20 Table of Contents As a result of the Farm Bill’s recent passage, we expect that there will be a constant evolution of laws and regulations affecting the CBD industry which could affect the Company’s plan of operations.

Biggest changeAs a result of the Farm Bill’s recent passage, we expect that there will be a constant evolution of laws and regulations affecting the CBD industry which could affect the Company’s plan of operations. Local, state and federal hemp laws and regulations may be broad in scope and subject to changing interpretations.

Any actions or investigations initiated against the Company by governmental authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations. Any actions or investigations initiated against the Company by governmental authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations.

Our business is subject to changing consumer trends and preferences. Our failure to accurately predict or react to these trends could negatively impact consumer opinion of us as a source for the latest products, which in turn could harm our customer relationships and cause us to lose market share.

Our business is subject to changing consumer trends and preferences. Our failure to accurately predict or react to these trends could negatively impact on consumer opinion of us as a source for the latest products, which in turn could harm our customer relationships and cause us to lose market share.

The CBD used by the Company is derived from hemp as defined in the Agriculture Improvement Act of 2018 (United States) (the “Farm Bill “) and codified at 7 USC 1639o means “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” The Cannabis sativa plant and its derivatives may also be deemed marijuana, depending on certain factors.

The CBD used by the Company is derived from hemp as defined in the Agriculture Improvement Act of 2018 (United States) (the “Farm Bill”) and codified at 7 USC 1639o means “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” The Cannabis sativa plant and its derivatives may also be deemed marijuana, depending on certain factors.

Additionally, we depend upon our employees to appropriately handle confidential data and deploy our IT resources in safe and secure fashion that does not expose our network systems to security breaches and the loss of data.

Additionally, we depend upon our employees to appropriately handle confidential data and deploy our IT resources in a safe and secure fashion that does not expose our network systems to security breaches and the loss of data.

To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our consolidated financial statements with other public companies difficult or impossible.

In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in this annual report.

In addition, as an emerging growth company, we are only required to provide two years of audited consolidated financial statements and two years of selected financial data in this annual report.

Our ability to successfully implement our business plan depends on our ability to build and maintain brand recognition using trademarks, service marks, trade dress and other intellectual property. We may rely on trade secret, trademark, patent and copyright laws, and confidentiality and other agreements with employees and third parties, all of which offer only limited protection.

Our ability to successfully implement our business plan depends on our ability to build and maintain brand recognition using trademarks, service marks, trade dress and other intellectual property. We may rely on trade secrets, trademark, patent and copyright laws, and confidentiality and other agreements with employees and third parties, all of which offer only limited protection.

We could incur obligations resulting from the activities of our independent distributors. We sell our products through a network of independent distributors. Independent distributors are independent contractors who operate their own business separate and apart from the Company. We may not be able to control certain aspects of our distributors’ activities that may impact our business.

We could incur obligations resulting from the activities of our independent distributors. We sell our products through a network of independent distributors. Independent distributors are independent contractors who operate their own business separately and apart from the Company. We may not be able to control certain aspects of our distributors’ activities that may impact our business.

The Company expects to face additional competition from existing competitors and new market entrants. If a significant number of new entrants enters the market in the near term, the Company may experience increased competition for market share and may experience downward pricing pressure on the Company’s products as new entrants increase production.

The Company expects to face additional competition from existing competitors and new market entrants. If a significant number of new entrants enter the market in the near term, the Company may experience increased competition for market share and may experience downward pricing pressure on the Company’s products as new entrants increase production.

The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited financial statements to stockholders will cause our expenses to be higher than they would be if we had remained privately held.

The costs of preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited consolidated financial statements to stockholders will cause our expenses to be higher than they would have if we had remained privately held.

Implementing our business plan may require more employees, capital equipment, supplies or other expenditure items than management has predicted. Likewise, the cost of compensating employees and consultants or other operating costs may be higher than management’s estimates, which could lead to sustained losses. We expect our quarterly financial results to fluctuate.

Implementing our business plan may require more employees, capital equipment, supplies or other expenditure items than management has predicted. Likewise, the cost of compensating employees and consultants or other operating costs may be higher than management’s estimates, which could lead to sustained losses. 11 Table of Contents We expect our quarterly financial results to fluctuate.

Increased competition may also drive the prices of our products down, which may have a material adverse effect on our results of operations in future periods. 22 Table of Contents Given the rapid changes affecting the global, national and regional economies generally, the Company may experience difficulties in establishing and maintaining a competitive advantage in the marketplace.

Increased competition may also drive the prices of our products down, which may have a material adverse effect on our results of operations in future periods. Given the rapid changes affecting the global, national and regional economies generally, the Company may experience difficulties in establishing and maintaining a competitive advantage in the marketplace.

Failure to comply, or any adverse results from such evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities. Increases in costs, disruption of supply or shortage of raw materials could harm our business.

Failure to comply, or any adverse results from such an evaluation could result in a loss of investor confidence in our financial reports and have an adverse effect on the trading price of our equity securities. 12 Table of Contents Increases in costs, disruption of supply or shortage of raw materials could harm our business.

Our failure to meet the continuing listing requirements of the NASDAQ Capital Market could result in a de-listing of our securities. If, after this offering, we fail to satisfy the continuing listing requirements of NASDAQ, such as the corporate governance, stockholders’ equity or minimum closing bid price requirements, NASDAQ may take steps to delist our Common Stock.

Our failure to meet the continuing listing requirements of the NASDAQ Capital Market could result in a de-listing of our securities. If we fail to satisfy the continuing listing requirements of NASDAQ, such as the corporate governance, stockholders’ equity or minimum closing bid price requirements, NASDAQ may take steps to delist our Common Stock.

Unfavorable research or publicity could have a material adverse effect on our ability to generate sales. Our failure to appropriately and timely respond to changing consumer preferences and demand for new products could significantly harm our customer relationships and have a material adverse effect on our business, financial condition and results of operations.

Unfavorable research or publicity could have a material adverse effect on our ability to generate sales. 14 Table of Contents Our failure to appropriately and timely respond to changing consumer preferences and demand for new products could significantly harm our customer relationships and have a material adverse effect on our business, financial condition and results of operations.

The successful assertion or settlement of any uninsured claim, a significant number of insured claims, or a claim exceeding the Company’s insurance coverage could have a material adverse effect on the Company. We may be unable to attract and retain independent distributors for our products.

The successful assertion or settlement of any uninsured claim, a significant number of insured claims, or a claim exceeding the Company’s insurance coverage could have a material adverse effect on the Company. 16 Table of Contents We may be unable to attract and retain independent distributors for our products.

We will be subject to the information and reporting requirements of the Exchange Act and other federal securities laws, including compliance with the Sarbanes-Oxley Act.

We are subject to the information and reporting requirements of the Exchange Act and other federal securities laws, including compliance with the Sarbanes-Oxley Act.

As we continue to grow our business and develop products, we expect to need additional research, development, managerial, operational, sales, marketing, financial, accounting, legal and other resources. The Company expects its growth to place a substantial strain on its managerial, operational and financial resources.

We may not be able to effectively manage growth. As we continue to grow our business and develop products, we expect to need additional research, development, managerial, operational, sales, marketing, financial, accounting, legal and other resources. The Company expects its growth to place a substantial strain on its managerial, operational and financial resources.

We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our Common Stock held by non-affiliates exceeds $700.0 million as of any December 31 before that time or if we have total annual gross revenue of $1.0 billion or more during any fiscal year before that time, after which, in each case, we would no longer be an emerging growth company as of the following December 31 or, if we issue more than $1.0 billion in non-convertible debt during any three-year period before that time, we would cease to be an emerging growth company immediately.

We expect to grow by acquiring relevant businesses, including other cannabis-related businesses. The consummation and integration of any acquired business, product or other assets into our Company may be complex and time consuming and, if such businesses and assets are not successfully integrated, we may not achieve the anticipated benefits, cost-savings or growth opportunities.

The consummation and integration of any acquired business, product or other assets into our Company may be complex and time consuming and, if such businesses and assets are not successfully integrated, we may not achieve the anticipated benefits, cost-savings or growth opportunities.

See also “Cautionary Statement Regarding Forward-Looking Statements.” Risks Relating to Our Company Our limited operating history makes it difficult for potential investors to evaluate our business prospects and management. The Company was incorporated on September 5, 2018 and only commenced operations thereafter. Accordingly, we have a limited operating history upon which to base an evaluation of our business and prospects.

See also “Cautionary Statement Regarding Forward-Looking Statements.” 10 Table of Contents Risks Relating to Our Company Our limited operating history makes it difficult for potential investors to evaluate our business prospects and management. The Company was incorporated on September 5, 2018, and only commenced operations thereafter.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such an increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials in our business including aluminum.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials in our business including industrial hemp, pecmate, pectin and other raw materials used in the product manufacturing process.

“Marijuana” is a Schedule I controlled substance and is defined in the Federal Controlled Substances Act at 21 USC Section 802(16) as “all parts of the plant Cannabis sativa L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds or resin.” Exemptions to that definition provided in 21 USC Section 802(16) include “the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination” or hemp as defined in 7 USC 1639o.

This could negatively affect our ability to meet consumer demand for our products. Upon expiration or termination of these agreements, our competitors may be able to secure industrial hemp from our existing suppliers which will put the company at a competitive disadvantage in the market. 18 Table of Contents Loss of key customers could harm our business.

Changes to state laws pertaining to industrial hemp could slow the use of industrial hemp, which could impact our revenues in future periods. Approximately 40 states have authorized industrial hemp programs pursuant to the Farm Bill. Additionally, various states have enacted state-specific laws pertaining to the handling, manufacturing, labeling, and sale of CBD and other hemp products.

Approximately 40 states have authorized industrial hemp programs pursuant to the Farm Bill. Additionally, various states have enacted state-specific laws pertaining to the handling, manufacturing, labeling, and sale of CBD and other hemp products. Compliance with state-specific laws and regulations could impact our operations in those specific states.

As a smaller reporting company, as defined in Rule 12b-2 under the Exchange Act, we will be required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) and to include an internal control report beginning with the Annual Report on Form 10-K for the fiscal year ending June 30, 2022.

Any material delay in obtaining, or inability to obtain, such licenses, permits and approvals is likely to delay and/or inhibit our ability to carry out our plan of operations and could have a material adverse effect on our business, financial condition and results of operations. 19 Table of Contents Potential future international expansion of our business could expose us to additional regulatory risks and compliance costs.

While progress within the industrial hemp industry is currently encouraging, growth is not assured, and while there appears to be ample public support for favorable legislative action, numerous factors may impact or negatively affect the legislative process(es) within the various states where we have business interests. 18 Table of Contents Unfavorable interpretations of laws governing hemp processing activities could subject us to enforcement or other legal proceedings and limit our business and prospects.

If we fail to successfully fill many management roles, fail to fully integrate new members of our management team, lose the services of key personnel, or fail to attract additional qualified personnel, it will be significantly more difficult for us to achieve our growth strategies and success. 15 Table of Contents We have limited supply sources, and price increases or supply shortages of key raw materials could materially and adversely affect our business, financial condition and results of operations.

In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property rights and proving any such infringement may be even more difficult. 13 Table of Contents We may not be able to effectively manage growth.

Protecting against unauthorized use of our trademarks and other intellectual property rights may be expensive, difficult and in some cases not possible. In some cases, it may be difficult or impossible to detect third-party infringement or misappropriation of our intellectual property rights and proving any such infringement may be even more difficult.

The Company believes that its continued success will depend upon the availability of raw materials that permit the Company to meet its labeling claims and quality control standards. The supply of our industrial hemp is subject to the same risks normally associated with agricultural production, such as climactic conditions, insect infestations and availability of manual labor or equipment for harvesting.

The supply of our industrial hemp is subject to the same risks normally associated with agricultural production, such as climactic conditions, insect infestations and availability of manual labor or equipment for harvesting.

In addition, there is the possibility that some jurisdictions may seek to hold us responsible for false product or earnings-related claims due to the actions of our independent distributors.

In addition, there is the possibility that some jurisdictions may seek to hold us responsible for false product or earnings-related claims due to the actions of our independent distributors. Liability for any of these issues could have a material adverse effect on our business, financial condition and results of operations.

We expect complying with these rules and regulations will substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly. 15 Table of Contents The increased costs associated with operating as a public company will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products.

The increased costs associated with operating as a public company will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business or increase the prices of our products.

If we are unable to successfully compete with existing companies and new entrants to the market, our lack of competitive advantage will have a negative impact on our business and financial condition. 16 Table of Contents Unfavorable publicity or consumer perception of our products or similar products developed and distributed by other companies could have a material adverse effect on our reputation, which could result in decreased sales and fluctuations in our business, financial condition and results of operations.

Unfavorable publicity or consumer perception of our products or similar products developed and distributed by other companies could have a material adverse effect on our reputation, which could result in decreased sales and fluctuations in our business, financial condition and results of operations.

The advertisement of our products is subject to extensive regulations in the markets in which we do business. Our independent distributors may fail to comply with such regulations governing the advertising of our products. We cannot ensure that all marketing materials used by our independent distributors comply with applicable regulations, including bans on false or misleading product and earnings-related claims.

We cannot ensure that all marketing materials used by our independent distributors comply with applicable regulations, including bans on false or misleading product and earnings-related claims.

In addition, it may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures.

We may need to hire additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls and reporting procedures.

Any actions or investigations initiated against the Company by governmental authorities or private litigants could have a material adverse effect on our business, financial condition and results of operations. 21 Table of Contents The shifting regulatory environment necessitates building and maintaining of robust systems to achieve and maintain compliance in multiple jurisdictions and increases the possibility that we may violate one or more of the legal requirements applicable to our business and products.

The shifting regulatory environment necessitates building and maintaining robust systems to achieve and maintain compliance in multiple jurisdictions and increases the possibility that we may violate one or more of the legal requirements applicable to our business and products.

Accordingly, if our cybersecurity systems and those of our contractors fail to protect against unauthorized access, sophisticated cyberattacks and the mishandling of data by our employees and contractors, our ability to conduct our business effectively could be damaged in a number of ways, including: 14 Table of Contents We may incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.

We may incur significant costs and require significant management resources to evaluate our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act, and any failure to comply or any adverse result from such evaluation may have an adverse effect on our stock price.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.

Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited consolidated financial statements.

Furthermore, violations of these laws, or alleged violations, could disrupt our business and result in a material adverse effect on our operations. We cannot predict the nature of any future laws, regulations, interpretations or applications, and it is possible that regulations may be enacted in the future that will be directly applicable to our business.

We cannot predict the nature of any future laws, regulations, interpretations or applications, and it is possible that regulations may be enacted in the future that will be directly applicable to our business. Changes to state laws pertaining to industrial hemp could slow the use of industrial hemp, which could impact our revenues in future periods.

Compliance with state-specific laws and regulations could impact our operations in those specific states. Continued development of the industrial hemp industry will be dependent upon new legislative authorization of industrial hemp at the state level, and further amendment or supplementation of legislation at the federal level.

Continued development of the industrial hemp industry will be dependent upon new legislative authorization of industrial hemp at the state level, and further amendment or supplementation of legislation at the federal level. Any number of events or occurrences could slow or halt progress all together in this space.

There are no similar exclusions for the use of CBD in non-drug topical products, as long as such products otherwise comply with applicable laws.

There are no similar exclusions for the use of CBD in non-drug topical products, as long as such products otherwise comply with applicable laws. The FDA created a task force to address the further regulation of CBD and other cannabis-derived products and is currently evaluating the applicable science and pathways for regulating CBD and other cannabis-derived ingredients.

If raw material prices increase in the future, we may not be able to pass on such price increases to our customers. A significant increase in the price of raw materials that cannot be passed on to customers could have a material adverse effect on our business, financial condition and results of operations.

Our products are composed of certain key raw materials. If the prices of such raw materials increase significantly, it could result in a significant increase in our product development costs. If raw material prices increase in the future, we may not be able to pass on such price increases to our customers.

In addition, if an acquired business or product line fails to meet our expectations, our business, financial condition, and results of operations may be adversely affected. 17 Table of Contents Failure to successfully integrate acquired businesses and their products and other assets into our Company, or if integrated, failure to further our business strategy, may result in our inability to realize any benefit from such acquisition.

Failure to successfully integrate acquired businesses and their products and other assets into our Company, or if integrated, failure to further our business strategy, may result in our inability to realize any benefit from such acquisition. We expect to grow by acquiring relevant businesses, including other cannabis-related businesses.

Operating results for future periods are subject to numerous uncertainties, and we cannot assure you that the Company will achieve or sustain profitability in the future. The Company’s prospects must be considered in light of the risks encountered by companies in the early stage of development, particularly companies in new and rapidly evolving markets.

The Company’s prospects must be considered in light of the risks encountered by companies in the early stage of development, particularly companies in new and rapidly evolving markets.

Local, state and federal hemp laws and regulations may be broad in scope and subject to changing interpretations. These changes may require us to incur substantial costs associated with legal compliance and may ultimately require us to alter our business plan.

These changes may require us to incur substantial costs associated with legal compliance and may ultimately require us to alter our business plan. Furthermore, violations of these laws, or alleged violations, could disrupt our business and result in a material adverse effect on our operations.

Such competition may cause us to encounter difficulties in generating revenues and market share, and in positioning our products in the market.

Such competition may cause us to encounter difficulties in generating revenues and market share, and in positioning our products in the market. If we are unable to successfully compete with existing companies and new entrants to the market, our lack of competitive advantage will have a negative impact on our business and financial condition.

Liability for any of these issues could have a material adverse effect on our business, financial condition and results of operations. 19 Table of Contents If our independent distributors’ failure to comply with applicable advertising laws and regulations could adversely affect our financial conditions and results of operations.

If our independent distributors’ failure to comply with applicable advertising laws and regulations could adversely affect our financial conditions and results of operations. The advertisement of our products is subject to extensive regulations in the markets in which we do business. Our independent distributors may fail to comply with such regulations governing the advertising of our products.

Removed

Protecting against unauthorized use of our trademarks and other intellectual property rights may be expensive, difficult and in some cases not possible.

Added

Accordingly, we have a limited operating history upon which to base an evaluation of our business and prospects. Operating results for future periods are subject to numerous uncertainties, and we cannot assure you that the Company will achieve or sustain profitability in the future.

Removed

We have limited supply sources, and price increases or supply shortages of key raw materials could materially and adversely affect our business, financial condition and results of operations. Our products are composed of certain key raw materials. If the prices of such raw materials increase significantly, it could result in a significant increase in our product development costs.

Added

In addition, it may be time-consuming, difficult and costly for us to develop and implement the corporate governance requirements, internal controls and reporting procedures required by the federal securities laws. This may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, and results of operations.

Removed

For the year ended June 30, 2021, a significant portion of our sales were to two large customers, but we do not have contracts for future purchases in place with either of these customers. As such, we do not have any purchase commitments from these customers, and there can be no assurance that they will continue to purchase our products.

Added

Removed

If these customers do not purchase our products in the future, and we are not able to generate a similar volume of sales from other customers, it could have a material effect on our total sales and result in a material adverse effect on our financial condition and business. There is limited availability of clinical studies.

Added

We expect complying with these rules and regulations will substantially increase our legal and financial compliance costs and make some activities more time-consuming and costly.

Removed

Substances meeting the definition of “hemp” in the Farm Bill and 7 USC 1639o may be used in clinical studies and research through an Investigational New Drug (“IND”) application with the Food and Drug Administration (the “FDA”).

Added

In addition, if an acquired business or product line fails to meet our expectations, our business, financial condition, and results of operations may be adversely affected.

Removed

Any number of events or occurrences could slow or halt progress all together in this space.

Added

A significant increase in the price of raw materials that cannot be passed on to customers could have a material adverse effect on our business, financial condition and results of operations. The Company believes that its continued success will depend upon the availability of raw materials that permit the Company to meet its labeling claims and quality control standards.

Removed

Unfavorable interpretations of laws governing hemp processing activities could subject us to enforcement or other legal proceedings and limit our business and prospects.

Removed

Potential future international expansion of our business could expose us to additional regulatory risks and compliance costs.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our executive and corporate offices are located at 3030 North Rocky Point Drive, Suite 420, Tampa, Florida 33607.

Biggest changeItem 2. Properties Our executive and corporate offices are located at 3030 North Rocky Point Drive, Suite 420, Tampa, Florida 33607, approximately 5,752 square feet under a 61 month lease, set to expire September 1, 2028.

Removed

We also maintain a warehouse located at 17129 US Highway North, Clearwater, FL 33764, which is owned by the Company, a warehouse located at 1710 Whitney Mesa Drive, Henderson, NV 89014 under a month-to-month agreement, a warehouse at 1051 Mary Crest Rd.

Added

We also maintain a warehouse located at 5626 West Linebaugh Avenue, Units 101-102, Tampa, Florida 33624, approximately 20,351 square feet under a 38 month lease, set to expire June 1, 2026 and a manufacturing facility at 2510 Merchant Ave, Odessa Florida 33556, approximately 10,200 square feet, under a five year lease set to expire on April 1, 2029.

Removed

Suite G, Henderson NV, 89074 under a three-year lease that will expire on April 30, 2024, a warehouse at 15000 S.

Added

The Company leases this facility from the owner our CEO, Allan Marshall. 20 Table of Contents

Removed

Avalon Blvd., Gardena, CA 90248 under a three year lease that will expire on September 30, 2024 that is no longer in use, a warehouse at 601 North Congress Ave, Suite 209 and 210, Delray Beach, FL 33445 under a five year lease that will expire September 30, 2026 and office space at 327 Plaza Real, Suite 2319, Boca Raton, FL 33432 under a three year, two month lease that will expire September 30, 2024, which has been transferred in the sale of Interactive Offers as of September 1, 2023.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company is not involved in any pending legal proceeding or litigation, and, to the best of its knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties are subject, which would reasonably be likely to have a material adverse effect on the Company. Item 4.

Added

Cygnet Online, LLC, et al.; Palm Beach County Case No. 2024CA006174; Filed July 1, 2024; Additional Parties: Eric Hanig. Cygnet, a wholly owned subsidiary of the Company, is the borrower under a promissory note and business loan agreement with Umpqua Bank. Hanig, the former principal of Cygnet, entered into an unconditional guarantee with Umpqua Bank.

Added

Umpqua Bank is alleging that Cygnet and Hanig are in default and contends $3,835,975.17 is due and owed. The Company is actively engaged in defending the foregoing lawsuit. · Get Fit Fast Supplements, LLC v. Cygnet Online, LLC, et al.; American Arbitration Association Case No. 01-24-0003-1085; Filed March 14, 2024; Additional Parties: Eric Hanig.

Added

Get Fit Fast Supplements, LLC (“GFF”) entered into an Asset Purchase Agreement with Cygnet. A portion of the purchase price was financed by Cygnet through a promissory note guaranteed by Hanig, the former principal of Cygnet. Additionally, Cygnet agreed to purchase GFF’s remaining inventory and agreed to earn out provisions whereby GFF would receive funds based on Cygnet’s future performance.

Added

The Company acquired Cygnet through a Securities Purchase Agreement, dated April 1, 2022. GFF claims damages in the amount of $3,075,859.17 based on Cygnet and Hanig’s failure to pay the full purchase price. Hanig and Cygnet separately counterclaimed against GFF for, among other things, fraudulent misrepresentations that led Cygnet and Hanig to enter into the Asset Purchase Agreement.

Added

As a result of the acquisition of Cygnet by the Company, Hanig has demanded indemnification from Upexi for the claims brought by GFF. The Company is actively engaged in defending the foregoing lawsuit. Item 4. Mine Safety Disclosures Not applicable.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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2024 filing

Biggest changeAccordingly, you may need to sell your shares of our Common Stock to realize a return on your investment; however, you may not be able to sell your shares at or above the price you paid for them. 21 Table of Contents Securities Authorized for Issuance under Equity Compensation Plans The Company has established a Company an incentive plan, 2019 Equity Incentive Plan, as amended (the “2019 Plan”).

The plan grants incentives to select persons who can make, are making and continue to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons and to encourage and reward such contributions by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restructured stock.

The plan grants incentives to select persons who can make, are making and continuing to make substantial contributions to the growth and success of the Company, to attract and retain the employment and services of such persons and to encourage and reward such contributions by providing these individuals with an opportunity to acquire or increase stock ownership in the Company through either the grant of options or restructured stock.

Holders of Record There were approximately 4,152 holders of record of the Company’s common stock on June 30, 2023. Dividend Policy We currently intend to retain our future earnings, if any, to finance the development and expansion of our businesses and, therefore, do not intend to pay cash dividends on our Common Stock for the foreseeable future.

Holders of Record There were approximately 3,811 holders of record of the Company’s common stock on June 30, 2024. Dividend Policy We currently intend to retain our future earnings, if any, to finance the development and expansion of our businesses and, therefore, do not intend to pay cash dividends on our Common Stock for the foreseeable future.

The Shareholders consented, and the Board of Directors approved amendment of the Stock Option Plan to increase the maximum number of Shares that may be issued thereunder to 10,000,000 Shares.

The Shareholders consented, and the Board of Directors approved amendment of the Stock Option Plan to increase the maximum number of Shares that may be issued thereunder to 500,000 Shares, as adjusted for the 1 for 20 reverse stock split.

Fourth Quarter Third Quarter Second Quarter First Quarter Fiscal 2023: High $ 4.55 $ 4.94 $ 5.70 $ 6.08 Low 2.04 2.53 2.70 3.68 Fiscal 2022: High $ 5.99 $ 5.17 $ 9.36 $ 7.40 Low 3.90 3.93 3.84 3.86 23 Table of Contents We consider our common stock to be thinly traded and, accordingly, reported sales prices or quotations may not be a true market-based valuation of our common stock.

Fourth Quarter Third Quarter Second Quarter First Quarter Fiscal 2024: High $ 0.60 $ 1.38 $ 1.75 $ 2.33 Low 0.36 0.48 0.75 1.56 Fiscal 2023: High $ 4.55 $ 4.94 $ 5.70 $ 6.08 Low 2.04 2.53 2.70 3.68 We consider our common stock to be thinly traded and, accordingly, reported sales prices or quotations may not be a true market-based valuation of our common stock.

Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders 10,000,000 $ 3.31 4,648,624 Total 10,000,000 $ 3.31 4,648,624 24 Table of Contents Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities In July of 2021, the Company issued 35,000 shares of common stock for a consulting agreement.

Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column) Equity compensation plans approved by security holders 213,214 $ 2.87 256,181 Total 213,214 $ 2.87 256,181 22 Table of Contents Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities In September of 2023, the Company was to issue 4,505 shares of common stock for the acquisition of the remaining 45% of Cygnet Online, LLC.

In September of 2021, the Company issued 306,945 shares of common stock for the acquisition of Infusionz. The shares were valued at $1,764,876 or $5.75 per share, as this was the remaining acquisition liability for the Infusionz purchase.

In March of 2024, the Company issued 5,000 shares of common stock as an incentive-restricted stock grant to certain employees. The shares were valued at $85,000 or $17.00 per share.

Removed

Securities Authorized for Issuance under Equity Compensation Plans The Company has established a Company an incentive plan, 2019 Equity Incentive Plan, as amended (the “2019 Plan”).

Added

The shares were valued at $162,727 or $35.80 per common share. These shares were held and not issued due to an ongoing dispute. In January of 2024, the Company issued 25,081 shares of common stock as repayment of $500,000 of the Company’s long-term debt. The shares were valued at $500,000 or $19.94 per share.

Removed

The shares were valued at $175,000 or $5.00 per share, based on the price of the services to be rendered. The shares were issued for services from a consultant pursuant to a consulting agreement.

Removed

In August of 2021, the Company issued 100,000 shares of common stock for the acquisition of VitaMedica and 7,000 shares of common stock as a finder’s fee for the completion of the transaction. The shares were valued at $515,740 or $4.82 per share, as this was the closing price of the stock on August 4, 2021.

Removed

In October of 2021, the Company issued 666,667 shares of common stock for the acquisition of Interactive, the shares were valued at $4,000,000 of $6.00 per share. Subsequently the Company clawed back 106,497 shares of common stock related to the working capital deficit at the time of the acquisition, the shares were valued at $638,982 or $6.00 per share.

Removed

In January of 2022, the Company issued 467,765 shares of common stock to employees and a consultant for services, valued at $649,230 or $4.02 per share. In March of 2022, the Company issued 36,582 shares of common stock for the cashless exercise of an option, valued at $163,887 or $4.48 per share.

Removed

In April of 2022, the Company issued 555,489 shares of common stock for the acquisition of Cygnet Online, LLC valued at $2,550,000 or $4.59 per share. In May of 2022, the Company issued 36,238 shares of common stock for the cashless exercise of an option, valued at $159,447 or $4.40 per share.

Removed

In May of 2022, the Company issued 119,792 shares of common stock for the cashless exercise of a warrant, valued at $651,668 or $5.44 per share. The warrant was issued for services from a consultant pursuant to a consulting agreement.

Removed

In October of 2022, the Company issued 1,247,403 shares of common stock for the acquisition of E-Core Technologies Inc. a Florida corporation, valued at $6,000,000 or 4.81 per common share. In February of 2023, the Company issued 134,000 shares of common stock for prepayment of interest on a note payable.

Removed

The shares were valued at $607,020 or $4.52 per common share and recorded as prepaid interest as the shares were issued at that time. In September of 2023, the Company issued 90,909 shares of common stock for the purchase of the remaining 45% of Cygnet Online, LLC. The shares were valued at $162,727 or $1.79 per common share.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

21 edited+72 added−54 removed13 unchanged

2023 filing

2024 filing

Biggest changeThe promissory note provides for monthly payments of interest beginning on March 22, 2023, and 12 monthly payments of principal beginning on December 22, 2023. We estimate that we will have sufficient working capital to fund our operations over the twelve months following the date of the issuance of these condensed consolidated financial statements and meet all our debt obligations.

Biggest changeManagement intends to finance operating costs over the next twelve months from the date of the issuance of these consolidated financial statements with existing cash on hand, cash flow from operations, proceeds from the sale of VitaMedica not yet received and additional short term debt financings, if necessary. 27 Table of Contents We estimate that we will have sufficient working capital to fund our operations over the twelve months following the date of the issuance of these condensed consolidated financial statements and meet all our debt obligations.

Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Use of Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

For most products that have been in the market for one year or greater, we consider inventory levels of greater than one year’s sales to be excess or other items that show slower than projected sales.

For most products that have been in the market for one year or more, we consider inventory levels of greater than one year’s sales to be excess or other items that show slower than projected sales.

Generally, obsolete inventory is sold to companies that specialize in the liquidation, while we continue to market slow-moving inventories until they are sold or become obsolete. As obsolete or slow-moving inventory is sold or disposed of, we write it off.

Generally, obsolete inventory is sold to companies that specialize in liquidation, while we continue to market slow-moving inventories until they are sold or become obsolete. As obsolete or slow-moving inventory is sold or disposed of, we write it off.

An impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, not to exceed the carrying value of goodwill. The Company performed its annual test as of June 30, 2023.

The Company had net proceeds of $6,127,893 from the issuance of stock and $7,120,000 in proceeds from the issuance of notes payable, including $1,470,000 of proceeds from a related party note payable, $3,000,000 of proceeds related to a note payable with a security interest in our building in Clearwater and $2,650,000 of unsecured debt.

During the year ended June 30, 2023, the Company had net proceeds of $6,127,893 from the issuance of stock and $7,120,000 in proceeds from the issuance of notes payable, including $1,470,000 of proceeds from a related party note payable, $3,000,000 of proceeds related to a note payable with a security interest in our building in Clearwater and $2,650,000 of unsecured debt.

Other sources of revenue and related costs are aggregated and viewed by management as immaterial or have similar economic characteristics, products, production, distribution processes and regulatory environment as the other product sales or directly support the Company’s single segment.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” or in other parts of this Annual Report on Form 10-K.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of certain assets and liabilities.

Infusionz LLC, a Colorado limited liability company, along with select CBD asset; and Interactive Offers, LLC a Delaware limited liability corporation have been classified as discontinued operations for the years ended June 30, 2023 and 2022, respectively and the assets and liabilities have been classified as current assets and liabilities of discontinued operations and assets held for sale on the balance sheets for June 30, 2023 and 2022.

Infusionz LLC, a Colorado limited liability company, along with select CBD asset; Interactive Offers, LLC a Delaware limited liability corporation; VitaMedica, a Nevada corporation; and E-Core Technology, Inc. d/b/a New England Technology, Inc. have been classified as discontinued operations for the years ended June 30, 2024 and 2023, respectively and the assets and liabilities have been classified as current assets, and liabilities of discontinued operations and assets held for sale on the balance sheets for June 30, 2024 and 2023.

See also “Cautionary Note Regarding Forward-Looking Statements” above. 25 Table of Contents Overview The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date.

Overview The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date.

The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable.

When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life in measuring whether or not the asset values are recoverable.

Actual results may differ from these estimates under different assumptions or conditions. 30 Table of Contents We have identified below the accounting policies, related to what we believe are most critical to our business operations and are discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policies affect our reported and expected financial results.

We have identified below the accounting policies, related to what we believe are most critical to our business operations and are discussed throughout Management’s Discussion and Analysis of Financial Condition or Plan of Operation where such policies affect our reported and expected financial results.

For the year ended June 30, 2023, the consolidated financial statements of Upexi, Inc. include all of the subsidiary accounts included in the consolidated financial statements for the year ended June 30, 2022, and include the subsidiaries in which the Company holds a controlling financial interest as of June 30, 2023, which include E-Core Technology, Inc. d/b/a New England Technology, Inc. as of October 21, 2022.

For the year ended June 30, 2024, the consolidated financial statements of Upexi, Inc. include all of the subsidiary accounts included in the consolidated financial statements for the year ended June 30, 2023, and include the subsidiaries in which the Company holds a controlling financial interest as of June 30, 2024 and 2023.

The Company did not recognize impairment on its long-lived assets during the years ended June 30, 2023, or 2022. Stock Based Compensation - The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair values.

Stock Based Compensation - The Company recognizes all share-based payments to employees, including grants of employee stock options, as compensation expense in the consolidated financial statements based on their fair values.

Additionally, the Company terminated the related Form S-3 registration statement. 29 Table of Contents On October 19, 2022, the Company and its indirect wholly owned subsidiary, Upexi 17129 Florida, LLC entered into a loan agreement with Professional Bank, A Florida state-chartered bank, providing for a mortgage on the Company’s principal office in N. Clearwater, Florida.

The newly issued debt was primarily used to repay the senior convertible note payable and the line of credit. On October 19, 2022, the Company and its indirect wholly owned subsidiary, Upexi 17129 Florida, LLC entered into a loan agreement with Professional Bank, a Florida state-chartered bank, providing for a mortgage on the Company’s principal office in N. Clearwater, Florida.

The remainder of the loan facility with Acorn Capital, LLC was fully repaid in October of 2022 when the Company received proceeds from the sale of Infusionz, including $613,466 in accrued interest, $250,000 for settlement of a Put Option and $7,900 in miscellaneous fees for a total of $5,146,437 to the holders of the $15 million senior secured convertible notes entered into on June 28, 2022.

On October 31, 2022, the “Company, paid $4,275,071 in principal, $613,466 in accrued interest, $250,000 for settlement of a put option and $7,900 in miscellaneous fees for a total of $5,146,437 to the holders of the $15 million senior secured convertible notes entered into on June 28, 2022. The payment terminated the agreement with the noteholders.

Shipping and handling fees billed to customers are included in revenue. Shipping and handling fees associated with freight are generally included in cost of revenue. Impairment of Long-lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable.

Impairment of Long-lived Assets - Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment.

The Company recognizes revenue at the point in time that control of the ordered product is transferred to the customer, which is upon shipment to the customer or other customer-designated delivery point.

The Company recognizes revenue from sales of our products, including sales to our distributors, at a point in time, generally upon shipment or delivery to the customer or distributor, depending upon the terms of the sales order.

Net cash flows used in financing activities for the year ended June 30, 2023, was $285,333 compared to $3,699,744 provided in the year ended June 30, 2022.

The $2,511,587 used in discontinued investing activities was $500,000 for the acquisition of VitaMedica and $2,051,587, net of cash acquired, for the acquisition of E-core. 26 Table of Contents Net cash flows used in financing activities for the year ended June 30, 2024 was $353,789 compared to $285,333 used during the year ended June 30, 2023.

Taxes collected from customers that are remitted to governmental agencies are accounted for on a net basis and not included as revenue. 31 Table of Contents The Company does not accept sales returns from wholesale customers, as the products are pre-approved prior to production and shipment. E-Commerce product returns must be completed within 45 days of the date of purchase.

Customer returns have historically represented a very small percentage of sales on an annual basis. Other product sales relate to some pet products, including small mechanical devices. Warranties: The Company does not accept sales returns from wholesale customers, as the products are pre-approved prior to production and shipment.

Removed

For the year ended June 30, 2022, the consolidated financial statements of Upexi, Inc. include the accounts of the Company and its wholly-owned subsidiaries; Trunano Labs, Inc.; a Nevada corporation, Steam Distribution, LLC, a California limited liability company; MW Products Inc. a Nevada corporation, One Hit Wonder, Inc., a California corporation; One Hit Wonder Holdings, LLC a California corporation; SWCH LLC, a Delaware limited liability company; Cresco Management LLC, a California limited liability company; VitaMedica d/b/a/ Grove Acquisition Subsidiary, Inc. a Nevada corporation as of August 1, 2021; and 55% Cygnet Online, LLC a Delaware limited liability corporation, as of April 1, 2022.

Added

All intercompany accounts and transactions have been eliminated as a result of the consolidation.

Removed

All intercompany accounts and transactions have been eliminated as a result of the consolidation. Key Factors Affecting Operating Results Cyclicality and Seasonality Our business can be affected by seasonality, which historically has resulted in higher sales volume during our second quarter, which ends December 31. Operating Segments The Company’s financial reporting is organized into two segments: Branded Products and Recommerce.

Added

Key Factors Affecting Operating Results Cyclicality and Seasonality Our business is typically unaffected by seasonality. 23 Table of Contents Operating Segments The Company’s financial reporting is organized into a single segment that includes production, sales and distribution of branded products, following the sale of E-Core, Technology Inc. and its subsidiaries.

Removed

Results of Operations Year Ended June 30, 2023, as compared to June 30, 2022: The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended June 30, 2023, and 2022, which are included herein. 26 Table of Contents June , 2023 2022 Change Revenue $ 80,676,509 $ 23,065,344 $ 57,611,165 Cost of revenue $ 47,118,189 $ 8,195,734 $ 38,922,455 Sales and marketing expenses $ 10,376,003 $ 5,116,868 $ 5,259,135 Distribution costs $ 12,369,903 $ 2,214,322 $ 10,155,581 General and administrative expenses $ 9,546,188 $ 9,141,667 $ 404,521 Other operating expenses $ 8,818,233 $ 4,885,883 $ 3,932,350 Other (expense) income $ (10,919,488 ) $ 101,082 $ (11,020,570 ) Net (loss) income attributable to non-controlling interest $ 559,967 $ (54,820 ) $ 614,787 Discontinued operations $ (2,068,054 ) $ 3,823,621 $ (5,891,675 ) Net loss attributable to Upexi, Inc. $ (16,930,289 ) $ (2,100,850 ) $ (14,182,442 ) Revenues increased by $57,611,165 or 250% for the fiscal year ended June 30, 2023, compared with the fiscal year ended June 30, 2022. $41,041,341 or 71% of the increase was related to the acquisitions of the LuckyTail brand and E-Core Technology, Inc.

Added

Results of Operations Year Ended June 30, 2024, as compared to June 30, 2023: The following summary of our results of operations should be read in conjunction with our consolidated financial statements for the years ended June 30, 2024, and 2023, which are included herein.

Removed

(“2023 acquisitions”) during 2023 and $18,848,230 or 33% was related to the acquisitions of Cygnet Online, LLC and VitaMedica, Inc. (“2022 acquisitions”) compared to the prior year period. This was offset by a decline in other businesses of $2,278,475 or 4%.

Added

June, 2024 2023 Change Revenue $ 26,000,652 $ 36,441,695 $ (10,441,043 ) Cost of revenue $ 13,176,073 $ 15,421,715 $ (2,245,642 ) Sales and marketing expenses $ 5,989,727 $ 6,067,392 $ (77,665 ) Distribution costs $ 8,611,702 $ 9,465,149 $ (853,447 ) General and administrative expenses $ 6,771,937 $ 6,875,575 $ (103,638 ) Other operating expenses $ 4,848,629 $ 7,146,286 $ (2,297,657 ) Other (expense) $ (3,141,166 ) $ (4,676,160 ) $ 1,534,994 Loss attributable to non-controlling interest $ - $ (559,967 ) $ 559,967 Impairment of intangible assets and goodwill $ 7,869,425 3,746,301 4,123,124 Lease impairment $ 289,969 - 289,969 (Loss) on the sale of assets and businesses $ (456,747 ) (2,212,542 ) 1,755,795 Discontinued operations $ (1,164,184 ) $ (1,370,124 ) $ 2,534,308 Net loss attributable to Upexi, Inc. $ (23,658,438 ) $ (16,930,289 ) $ (6,728,149 ) Revenues decreased by $10,441,043 or 29% for the fiscal year ended June 30, 2024, compared with the fiscal year ended June 30, 2023.

Removed

Our primary brands of VitaMedica, LuckyTail and newly acquired Tytan Tiles all had significant growth year over year and management will continue to focus on these high margin and growth potential business in 2024 and beyond.

Added

The product sales were down approximately $15,400,000 or 42% compared to the prior year, with the most significant decline being the sales of products through third party sales channels, such as Amazon, with the largest decline coming from the products where we do not own the brand. The decline in sales was partially offset by approximately $5,000,000 in manufacturing sales.

Removed

The recommerce businesses, E-Core Technology, Inc. and Cygnet Online, LLC, continue to represent a significant portion of the overall revenue of the Company, although we did see lower than expected sales volume from our Amazon sales channels. Management expects revenue to continue to increase in the 2024 fiscal year with a primary focus on growing our branded products.

Added

Management has augmented the overall strategy of the Company to focus on product sales, including the development, production and distribution of branded products. In addition, sales were affected by the manufacturing consolidation to Florida, which was completed by August 1, 2024, with manufacturing returning to full production.

Removed

Cost of revenue increased by $38,922,455 or 475% compared with the fiscal year ended June 30, 2022. $31,144,149 or 80% of the increase was related to the 2023 acquisitions and $8,640,033 or 22% was related to the 2022 acquisitions. The gross profit increased by $18,688,710.

Added

Cost of revenue decreased by $2,245,642 or 15% compared with the fiscal year ended June 30, 2023. The gross profit decreased by $8,195,401 or 39% compared with the prior year and gross margin declined by 8.36% to 49.32% compared to 57.68%.

Removed

The gross profit margin declined by 22% to 42% compared to 64% in the prior year. The decline in gross profit margin was primarily related to the sales from the recommerce business versus the sales of our branded products.

Added

The majority of the decline in gross profit was the $10,441,043 decrease in year over year sales, however the gross margin decline was primarily related to the $3,020,062 inventory write off and increase in the inventory reserves compared to only $92,378 expense in the year ended June 30, 2023.

Removed

Management expects the gross margin to improve as the branded products segment continues to grow as a percentage of the overall sales and as we continue to gain economies of scale in our purchasing of products.

Added

This additional $2,927,684, non-cash expense recognized during the year ended June 30, 2024, reduced the gross margin by 11.26%. The inventory write off was caused by both the strategic consolidation of operations to Florida and the change in overall strategy with the elimination of the recommerce strategy.

Removed

Sales and marketing expenses increased by $5,259,135 or 103% compared with the same period last year. $2,396,876 or 46% of the increase was related to the 2023 acquisitions and $1,373,733 or 26% was related to the 2022 acquisitions. There was an increase of $1,488,526 or 28% related to the other business.

Added

Management expects the gross margin to improve with the change in strategic focus and the completed consolidation of operations. Sales and marketing expenses decreased by $77,665 or 1% compared with the same period last year. The expenditures for both years was similar in total.

Removed

The increase in sales and marketing expenses was primarily related to the acquisitions and increased expenditures for brand and company awareness, however management has aligned the marketing expenditures with the expected growth strategy to decrease the overall percentage of sales and marketing costs to sales.

Added

We anticipate our advertising expenses will remain consistent with an overall decrease in sales and marketing as a percentage of total sales as we have impended our overall brand marketing strategy and we will be able to increase sales significantly without large increases in the expenses. 24 Table of Contents Distribution costs decreased $853,447 or 9% compared with the same period last year.

Removed

We anticipate our advertising expenses will continue to fluctuate in the following quarters as we fully implement our overall brand marketing strategy.

Added

The decrease was related to the decreased sales and the consolidation of facilities. Management has implemented a strategy to change promotions, increase shipping prices and adjust packaging for whole sales verses direct to consumer shipments to lower the overall percentage of distribution costs to sales.

Removed

Distribution costs increased $10,155,581 or 459% compared with the same period last year. $1,850,306 or 18% of the increase was related to the 2023 acquisitions and $7,306,309 or 72% of the increase was related to the 2022 acquisitions and the rest of the business. There continue to be increases in transportation costs and third-party provider rates.

Added

The consolidation strategy and other distribution cost reduction strategies are expected to be fully realized in the coming year. General and administrative expenses decreased by $103,638 or 2% compared with the same period last year. General and administrative expenses were similar to the prior year.

Removed

Management has implemented a strategy to change promotions, increase prices and adjust packaging to decrease the overall percentage of distribution costs to sales and is in process of consolidating its distribution centers, including closing the California facility as of July 1, 2023. General and administrative expenses increased by $404,521 or 4% compared with the same period last year.

Added

Since the consolidation to Florida and other changes in the business, management has actively been reducing general and administrative costs. Management expects that general and administrative expenses will decline for the period July 1, 2024 to September 30, 2024, with the most significant declines being realized in periods ending after December 31, 2024.

Removed

General and administrative expenses increased by $2,332,690 from 2023 acquisitions with the remainder of the business had a decrease in general and administrative expenses of $1,928,169. Management has actively been reducing general and administrative costs by consolidation of administrative functions and capitalizing on the overall size of the Company.

Added

Other operating expenses decreased by $2,297,657 or 32% compared with the same period last year. These expenses are primarily non-cash expense for amortization of stock compensation, amortization of acquired intangible assets and depreciation. The decrease in the amortization of stock compensation was $2,494,695 as older grants are fully amortized and there have only been limited grants in the past year.

Removed

Management will continue to implement strategies to decrease the percentage of general and administrative costs when compared to total sales. Other operating expenses increased by $3,932,350 or 80% compared with the same period last year.

Added

This decline was offset by slightly higher depreciation expense during the year. Other expense decreased by $1,534,994 or 33%, which related to the significant amount of interest expensed in the prior year when the Company entered into a letter of agreement to repay all amounts owed and terminate all security interests the lender held, including the Form S-3 registration statement.

Removed

These expenses are primarily non-cash and increase based on the intangible assets created with acquisitions and the continued amortization of stock compensation. $1,612,815 or 41% was related to the 2023 acquisitions amortization of acquired intangible assets and $1,616,188 or 41% of the increase was related to the 2022 acquisitions amortization of acquired intangible assets.

Added

The Company also had non-cash interest related to the amortization of the consideration discount of $1,112,676 and $969,098 for the years ended June 30, 2024, and June 30, 2023, respectively. There was a loss of $559,967 attributable to non-controlling interest in 2023 compared to none in 2024 as the Company purchased the remaining non-controlling interest in the current year.

Removed

The remaining increase of $703,347 was related to increases in stock-based compensation and depreciation. 27 Table of Contents Other expenses increased by $11,020,570, which was primarily the loss recognized on the sale of Infusionz and select CBD assets, the reserves against amounts owed to the Company by the buyers of that business, the impairment of Interactive Offers intangible assets and an increase of interest expense from both acquisition debt and the termination of a $15,000,000 senior secured debt facility on October 1, 2022.

Added

There was an impairment of intangible assets and goodwill of $7,869,425 in the year ended June 30, 2024. $6,844,745 of the impairment was from the acquisition of Cygnet and related to the Company exiting the recommerce business.

Removed

Management estimates based on the current and expected debt balances in fiscal year 2024 that interest expense will be less than $2,800,000 and cash paid for interest expense to be less than $1,400,000. The Company had a net loss of $16,930,289 compared to a net loss of $2,100,850 in the prior year.

Added

The remaining $974,680 impairment was related to the LuckyTail acquisition and the significant decline in direct to consumer business as LuckyTail primarily sells through Amazon. There was an impairment of intangible assets and goodwill of $3,746,301 in the year ended June 30, 2023, and related to the valuation of the Interactive Offers and the subsequent sale of the business.

Removed

The decrease in the net losses primarily related to the above-mentioned changes, which was offset by the net loss attributable to non-controlling interest of our consolidated subsidiary. Operating Segments The Company’s financial reporting is organized into two segments: Our Branded Product segment and our Recommerce segment.

Added

The Company recognized an impairment $289,969 on the Delray Beach warehouse during 2024 as part of closing the warehouse and the Company exiting the recommerce business. No such items for 2023. The Company recognized a valuation allowance on its deferred tax asset of $6,100,000 during the year ended June 30, 2024.

Removed

Our Branded Product segment is focused on the development, growth and distribution of the branded products that we own. Our Recommerce segment is focused on the purchase and sale of new and used products through channels such as Amazon and wholesale distributors.

Added

This was done as management estimated the probable future usage of the Company’s net operating loss carry forward.

Removed

Other sources of revenue and related costs are aggregated and viewed by management as immaterial or have similar economic characteristics, products, production, distribution processes and regulatory environment as the other product sales. Segment Information The Company provides the following segments: (a) branded product segment and (b) product distribution segment.

Added

The loss on the sale of assets and businesses of $456,747 was related to a loss on the sale of E-Core of $1,737,326, the loss on the sale or abandonment of assets not necessary for operations at the new Florida facility and an impairment on the largo facility that was sold on July 8, 2024.

Removed

For the year ended June 30, 2023: Branded Products Recommerce Total Revenue $ 26,526,385 $ 54,150,124 $ 80,676,509 Loss from operations $ (6,945,411 ) $ (606,596 ) $ (7,552,007 ) Other (expense) $ (10,378,183 ) $ (541,305 ) $ (10,919,488 ) Depreciation expense $ 944,704 $ - $ 944,704 Income tax benefit $ 3,049,293 $ - $ 3,049,293 Segment assets: Additions to property, plant, and equipment $ 1,078,264 $ - $ 1,078,264 Total assets $ 28,588,365 $ 35,264,702 $ 63,853,067 Liquidity and Capital Resources Working Capital As of June 30, 2023 As of June 30, 2022 Current assets $ 25,455,714 $ 17,061,622 Current liabilities $ 19,606,010 $ 10,127,748 Working capital $ 5,849,291 $ 6,933,874 28 Table of Contents Cash Flows Years Ended June 30, 2023 2022 Cash flows provided by operating activities – continuing operations $ 517,697 $ 715,150 Cash flows used in investing activities – continuing operations (2,574,858 ) (10,903,318 ) Cash flows used in financing activities – continuing operations (285,333 ) 3,699,744 Cash flows used by operating activities – discontinued operations (315,021 ) (895,981 ) Cash flows provided by (used by) investing activities – discontinued operations - - Cash flows provided by (used by) financing activities – discontinued operations - - Net decrease in cash during the period $ (2,657,515 ) $ (7,384,405 ) On June 30, 2023, the Company had cash of $4,492,291 or a decrease of $2,657,515 from June 30, 2022.

Added

This loss was offset by a $1,948,538 gain on the sale of VitaMedica and a gain on the sale of Infusionz and CBD related assets, which was recorded as a $2,212,542 loss in the prior year.

Removed

The decrease in cash was primarily used for investing in the acquisition of new entities and the purchase of property and equipment. The Company financed some of the investment through financing activities. The net cash provided by operating activities was $517,697 and offset by cash used in discontinued operations of $315,021.

Added

The income and loss on discontinued operations was as follows: June 30, 2024 June 30, 2023 Interactive Offers $ (187,003 ) $ (1,729,636 ) Infusionz 71,976 (338,418 ) E-Core 1,065,575 1,080,379 VitaMedica 213,636 (382,449 ) $ 1,164,184 $ (1,370,124 ) 25 Table of Contents The Company had a net loss of $21,396,857 compared to a net loss of $16,930,289 in the prior year.

Removed

The loss of $16,284,292 was offset by the non-cash expenses of $5,153,695 depreciation and amortization, impairment of goodwill and identifiable intangible assets, $3,664,538 amortization of stock compensation, $2,212,542 of non-cash loses for the sale of Infusionz $969,098 amortization of consideration discount offset by $3,785,224 changes in deferred tax asset.

Added

The increase in the net losses primarily related to the above-mentioned changes.

Removed

The losses were also offset by an increase in liabilities of $3,312,604 and a decrease of $1,905,234 in current assets. Net cash used in investing activities for the years ended June 30, 2023, and 2022 was $2,574,858 and $10,903,318, respectively.

Added

Liquidity and Capital Resources Working Capital As of June 30, 2024 As of June 30, 2023 Current assets $ 11,419,918 $ 30,012,984 Current liabilities $ 12,655,152 $ 22,391,587 Working capital $ (1,235,234 ) $ 7,621,397 Cash Flows Years Ended June 30, 2024 2023 Cash flows (used in) operating activities – continuing operations $ (4,894,751 ) $ (7,421,529 ) Cash flows provided by (used in) investing activities – continuing operations 831,112 (23,271 ) Cash flows (used in) provided by financing activities – continuing operations (353,789 ) 6,032,901 Cash flows provided by operating activities – discontinued operations 4,793,374 7,624,206 Cash flows used by investing activities – discontinued operations (4,206,823 ) (2,551,587 ) Cash flows used by financing activities – discontinued operations - (6,318,234 ) Net decrease in cash during the period $ (3,830,877 ) $ (2,657,514 ) On June 30, 2024, the Company had cash of $661,415 or a decrease of $3,830,877 from June 30, 2023.

Removed

For the year ended June 30, 2023, cash of $7,129,826 was used for two new acquisitions and payment related to prior year acquisitions and $937,564 for the acquisition of property and equipment and improvements to the building purchased in 2022. This was partially paid for with the $5,492,532, net cash received for the sale of Infusionz and select CBD assets.

Added

The decrease in cash was primarily the net loss from operations and the significant change in continuing operations with the recent sale of businesses and the change of the Company’s overall strategy. The net cash used by continuing operating activities was $4,894,751 and offset by cash provided by discontinued operations of $4,793,374.

Removed

For the year ended June 30, 2022, the use of cash was primarily related to the investment of $5,457,545 in three acquisitions, $4,515,735 for the purchase of a building in Clearwater Florida and the related remodel of the acquired building and $936,038 for the acquisition of equipment.

Added

The loss of $23,658,438 was offset by the non-cash expenses of $3,948,084 depreciation and amortization, $7,869,425 impairment of goodwill and identifiable intangible assets, $1,112,676 amortization of stock compensation and $1,812,319 write of inventory. The sale of business and the impairment recognized on the warehouse were minimal at a total of $112,448 used.

Removed

The newly issued debt was primarily used to repay the senior convertible note payable and the line of credit.

Added

The change in deferred tax asset was $344,802 with a valuation reserve of $6,100,000. The change in operating assets and liabilities provided cash of $2,907,978. Cash provided by discontinued operating activities was $4,793,374 and primarily related to decreases in E-core’s inventory and accounts receivable.

Removed

On April 15, 2022, the Company entered into a non-negotiable convertible promissory note in the original principal amount of $1,050,000, as adjusted, (“Cygnet Note”) which can be converted into common stock of the Company at a price of $6.00 per share and is payable in full, to the extent not previously converted, on April 15, 2023.

… 67 more changes not shown on this page.

Top changes in UPEXI, INC.'s 2024 10-K

Item 1. Business

Item 1A. Risk Factors

Item 2. Properties

Item 3. Legal Proceedings

Item 5. Market for Registrant's Common Equity

Item 7. Management's Discussion & Analysis

Other UPXI 10-K year-over-year comparisons